Most of the cattle contracts performed in sync this week, except for the expiring Nov feeder cattle contract, which was tied to cash. Both the live cattle and feeder cattle deferred contracts started the week off posting solid gains but then faded to trade in the red for the rest of the week. On the flip side of that, the expiring Nov feeder cattle contract closed with solid gains for the first three sessions but then faded lower on its last day to get in line with the cash feeder cattle index.
What makes the feeder cattle contract interesting, the Nov contract went off the board at $340.65, the cash feeder cattle index (index of cash trades) is at $340.02, the Jan feeder cattle contract is at $316.375. The way the feeder cattle market looks, the Jan contract is extremely undervalued as it is at a $24.275 discount to the Nov contract.
Both cattle contracts gapped lower on the opening bell, testing the lower side of Friday’s session. The selloff was short lived as within minutes cattle found support and proceeded to rally higher for the rest of the session, ending the session with solid gains. Early selling was tied to reports that Trump signed an executive order removing import tariffs on beef from New Zeeland, Australia, and Argentina. But the fact that Brazil of Mexico was not on the list helped cattle find support. A report from JBS stating that they expect Q4 supplies to be tighter than Q3 and that supplies will remain tight into 2026 added support.
Selling moved into the cattle contracts on Tuesday. Cattle started the session mixed with live cattle seeing gains while feeder cattle started lower. Selling took charge early, pushing both contracts into the red early in the session. But cattle were able to fight back and rallied to end with only small losses. Support came from reports that although the administration is looking at lower import tariffs on US beef (which they did with New Zeeland, Australia, and Argentina), they did not lower the import tariff on Brazil as much as expected, only 10% putting it at 66.4%. The lack of a cash trade and higher corn market added pressure.
Heavy selling was seen impacting the cattle market midweek. Cattle opened the session mixed with live cattle starting lower while feeder cattle started higher. It did not take long for cattle to fade their opening and expand session losses. Supply and demand concerns continue to pressure cattle as traders are still concerned that the administration will continue to meddle with imports. Technical selling was also evident as cattle tested support. Position squaring ahead of Friday’s COF reports was also seen.
The pattern for the week seems to be set with once again the meats taking the path of least resistance to end the week Thursday. The front month Nov feeder cattle contract expired at $340.65 which is in line with the cash feeder cattle index, which closed the day at $340.02. Both cattle contracts opened the session higher, but once early technical buying slowed, heavy selling returned to push cattle lower. Technically cattle are sitting at support, but it appears that traders are concerned about entering the long side of the market again in fear of supply manipulation. The fundamental issue that pushed cattle to all-time highs is still a problem as supplies still remain very tight. Seasonally cattle are not a feature this time of year though and that could be adding a bit of pressure. Position squaring ahead of Friday’s two COF reports was also seen.
Early estimates for the Oct COF report are On Feed: 98%, Placed: 91%, and Marketed: 96%.
Early estimates for Nov COF report are On Feed: 98%, Placed: 92%, and Marketed: 92%.
For the week, Dec live cattle closed at $214.45 down $4.70. November feeder cattle expired at $340.65 up $1.975 while the Jan feeder cattle closed at $314.225 down $6.325.
Cattle Weekly Comments November 21
Cattle Weekly Comments November 21
Most of the cattle contracts performed in sync this week, except for the expiring Nov feeder cattle contract, which was tied to cash. Both the live cattle and feeder cattle deferred contracts started the week off posting solid gains but then faded to trade in the red for the rest of the week. On the flip side of that, the expiring Nov feeder cattle contract closed with solid gains for the first three sessions but then faded lower on its last day to get in line with the cash feeder cattle index.
What makes the feeder cattle contract interesting, the Nov contract went off the board at $340.65, the cash feeder cattle index (index of cash trades) is at $340.02, the Jan feeder cattle contract is at $316.375. The way the feeder cattle market looks, the Jan contract is extremely undervalued as it is at a $24.275 discount to the Nov contract.
Both cattle contracts gapped lower on the opening bell, testing the lower side of Friday’s session. The selloff was short lived as within minutes cattle found support and proceeded to rally higher for the rest of the session, ending the session with solid gains. Early selling was tied to reports that Trump signed an executive order removing import tariffs on beef from New Zeeland, Australia, and Argentina. But the fact that Brazil of Mexico was not on the list helped cattle find support. A report from JBS stating that they expect Q4 supplies to be tighter than Q3 and that supplies will remain tight into 2026 added support.
Selling moved into the cattle contracts on Tuesday. Cattle started the session mixed with live cattle seeing gains while feeder cattle started lower. Selling took charge early, pushing both contracts into the red early in the session. But cattle were able to fight back and rallied to end with only small losses. Support came from reports that although the administration is looking at lower import tariffs on US beef (which they did with New Zeeland, Australia, and Argentina), they did not lower the import tariff on Brazil as much as expected, only 10% putting it at 66.4%. The lack of a cash trade and higher corn market added pressure.
Heavy selling was seen impacting the cattle market midweek. Cattle opened the session mixed with live cattle starting lower while feeder cattle started higher. It did not take long for cattle to fade their opening and expand session losses. Supply and demand concerns continue to pressure cattle as traders are still concerned that the administration will continue to meddle with imports. Technical selling was also evident as cattle tested support. Position squaring ahead of Friday’s COF reports was also seen.
The pattern for the week seems to be set with once again the meats taking the path of least resistance to end the week Thursday. The front month Nov feeder cattle contract expired at $340.65 which is in line with the cash feeder cattle index, which closed the day at $340.02. Both cattle contracts opened the session higher, but once early technical buying slowed, heavy selling returned to push cattle lower. Technically cattle are sitting at support, but it appears that traders are concerned about entering the long side of the market again in fear of supply manipulation. The fundamental issue that pushed cattle to all-time highs is still a problem as supplies still remain very tight. Seasonally cattle are not a feature this time of year though and that could be adding a bit of pressure. Position squaring ahead of Friday’s two COF reports was also seen.
Early estimates for the Oct COF report are On Feed: 98%, Placed: 91%, and Marketed: 96%.
Early estimates for Nov COF report are On Feed: 98%, Placed: 92%, and Marketed: 92%.
For the week, Dec live cattle closed at $214.45 down $4.70. November feeder cattle expired at $340.65 up $1.975 while the Jan feeder cattle closed at $314.225 down $6.325.